Adjustments to Income

Student Loan Interest

Who Can Claim the Deduction?

To claim the deduction, the taxpayer must have paid qualified student loan interest for an eligible student under all the following conditions:

The taxpayer cannot use Married Filing Separately status; married taxpayers must file a joint return with their spouse

The taxpayer cannot be claimed as a dependent on someone else's return

The taxpayer is legally obligated to pay interest on a qualified student loan

The taxpayer paid interest on a qualified student loan

The interest is on a loan used to pay tuition and other qualified higher education expenses for the taxpayer, the taxpayer's spouse, or someone whom the taxpayer claimed as a dependent, when the loan was taken out

The education expenses were paid or incurred within a reasonable period of time before or after the loan was taken out

The person for whom the expenses were paid or incurred was an eligible student

Conduct a probing interview to verify that the taxpayer meets all these tests for the deduction.

Question: Can taxpayers who were dependents when they took out their student loan start to deduct student loan interest after they are no longer a dependent?

Answer: Yes. Although dependent taxpayers cannot claim the deduction, they can deduct interest payments made in later years when they can no longer be claimed as a dependent.